Learning the lessons of lean

Supply chains and engineering design are the next priority for lean thinking; there’s been a lot of good work at the factory level, but unless we get away from the old adversarial external and internal relationships, we’re never going to become world class manufacturing businesses.” So says Daniel Jones, professor of manufacturing management at Cardiff University and founder of its Lean Enterprise Research Centre (LERC), and latterly chairman of the UK Lean Enterprise Academy (LEA). And although well aware of the clash between ‘lean’ and the received wisdom of enterprise (ERP) systems, he insists that modern IT, in terms of tools and systems, has multiple pivotal roles in this endeavour, both as enabler and underpinning technology. Forthright and incisive, this is a man who’s devoted the last two decades to the theory and practice of implementing lean, first in automotive, then across the broad swathe of manufacturing industry and latterly taking the business concepts to other sectors. Now 54 and a ‘lean’ celebrity with several best sellers, tools and methodologies to his and his associates’ credit, Jones came to fame in 1990 with ‘The Machine that Changed the World’, which won the Financial Times Best Business Book and sold 300,000 copies. That came out of work at MIT (Massachusetts Institute of Technology) with US lean manufacturing guru Jim Womack on the International Motor Vehicle Programme, tasked with learning from the Toyota and Lexus phenomenon. It was all about how to close the Japanese productivity and quality gaps, which at the time were “around 2:1 and 100:1 respectively”, through understanding and stripping out waste. He set up LERC in 1993, growing it from one to its current 25 staff, and has since expanded the application of lean beyond shop floors to include everything from product development to supply chain management – the subject of his next book. He’s been active in everything from aerospace, to general engineering, and from construction to healthcare and the retail market and is currently setting up self-help institutions like LEA (www.leanuk.org) all over the world. In 1996 he published ‘Lean Thinking: Banish Waste and Create Value in your Corporation’, with an inspirational set of case studies. “It was published for the recession of 1997 that never happened, but it’s very appropriate in today’s hard times,” he says. And he’s absolutely right; his books, his advice and his organisations are particularly relevant now, as we wrestle with recession and intensifying global competition. They answer the abiding big question: ‘How do I seriously cut costs while simultaneously improving customer service and at least maintaining quality?’. The key: “Manufacturers need to rethink the way customers define value,” says Jones. “Often now it’s about the use of a product and the support, upgrades and maintenance they get. So we need to redefine customer value at one end and improve the supply chains that deliver it, while taking out waste.” Lean, he says, can do it, but only if taken right through an organisation’s culture. “Too many manufacturers see lean as just a bunch of tools; ‘we’ll do some Kanban here, a bit of JIT there,’ etc. They don’t seem to understand that for it to work, you have to treat is as a whole business system.” To get over that hurdle, he suggests the starting point is “to literally follow an order through the factory to see what’s really happening.” LEA has value stream mapping tools to help, and their value, he says is that not only do they raise the business consciousness of lean, they also simultaneously prioritise actions that will bring best improvements. From an IT perspective, Jones says the precepts of lean will please many, because they dictate simplicity and pragmatism. So whereas lean as it at odds with big ERP system mentality inasmuch as it seeks to control complexity centrally, it nevertheless depends upon modern software tools and integrated systems that support, optimise and provide visibility into lean processes. “MRP was about how to sweat your assets and manage your procurement and materials centrally around the BoM (bill of materials). Extend that massively to ERP and you have a vastly more complex system, which is one of the reasons many have fallen over. But the fact is, if you’re compressing factory operations from six weeks to three days then you can hugely simplify ERP intervention in production.” Beyond that, he says the IT that’s going to make most difference is electronic web-based Kanbans, with supplier and customer collaboration, and simulation systems aimed at optimising production layouts and processes. With lean operations working, the requirement of IT is about seeing and ensuring the flow of materials and processes, rather than controlling every action.